Acclaim for THE LEAN STARTUP

For example, a startup might create a complete prototype of its
product and oer to sell it to real customers through its main
marketing channel. This single MVP would test most of the startup’s
assumptions and establish baseline metrics for each assumption
simultaneously. Alternatively, a startup might prefer to build
separate MVPs that are aimed at getting feedback on one
assumption at a time. Before building the prototype, the company
might perform a smoke test with its marketing materials. This is an
old direct marketing technique in which customers are given the
opportunity to preorder a product that has not yet been built. A
smoke test measures only one thing: whether customers are
interested in trying a product. By itself, this is insucient to
validate an entire growth model. Nonetheless, it can be very useful
to get feedback on this assumption before committing more money
and other resources to the product.
These MVPs provide the first example of a learning milestone. An
MVP allows a startup to ll in real baseline data in its growth
model—conversion rates, sign-up and trial rates, customer lifetime
value, and so on—and this is valuable as the foundation for learning
about customers and their reactions to a product even if that
foundation begins with extremely bad news.
When one is choosing among the many assumptions in a business
plan, it makes sense to test the riskiest assumptions first. If you can’t
nd a way to mitigate these risks toward the ideal that is required
for a sustainable business, there is no point in testing the others. For
example, a media business that is selling advertising has two basic
assumptions that take the form of questions: Can it capture the
attention of a dened customer segment on an ongoing basis? and
can it sell that attention to advertisers? In a business in which the
advertising rates for a particular customer segment are well known,
the far riskier assumption is the ability to capture attention.
Therefore, the rst experiments should involve content production
rather than advertising sales. Perhaps the company will produce a
pilot episode or issue to see how customers engage.